TNAG-1989-FCO40-2822-Hong-Kong-Telecommunications-(Amendment)-Ordinance-1989-(No.-1989 — Page 209

XCC (89)44

Expressions of Interest

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The Administration has received a number of enquiries regarding the possibility of operating a second commercial radio station. One consortium, including the interest s Hutchison Telecommunications and Sing Tao, has submitted comprehensive proposals in support of a bid for commercial radio broadcasting licence.

a second

Consultation

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In accordance with the decision of this Council on 14 October 1986 that the BA's responsibilities should in future extend to all matters pertaining to radio, television and cable television, the Administration asked the BA for its advice on the future of commercial radio broadcasting and, following this,

on the conditions subject to which the licence may be held by CRHK.

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BA noted that there was scope for growth in the radio industry in Hong Kong and considered that the Administration should introduce greater compet it ion to the industry. in principle, BA considered that competition in a market-based environment should enhance both the quality and quantity of broadcast programmes.

It was further noted that the financial and other barriers to entry into radio broadcasting as opposed to television were few and that Hong Kong's fast growing economy should be able to support two commercial radio broadcasting stations provided they offered diverse programme services which appealed to the public. Based on the availability of frequencies, BA considered that two packages each containing the same number and distribution of frequencies (i.e. 1 AM + 2 FM) should in principle be awarded by tender.

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The BA, however, recommended that one of the licences should be offered to CRHK without recourse to tender for the following reasons

(a) the territory-wide FM transmission plan will

not be implemented before December 1989. Consequent ly the new configuration of 1 AM + 2 territory-wide FM frequencies cannot be implemented until then. If both licences were to be tendered on this configuration, there would have to be a service break at least between August and December 1989, assuming CRHK were successful;